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Remortgage market to pick up pace

Adam Williams
Written By:
Posted:
19/03/2015
Updated:
18/03/2015

The remortgage market will begin to grow this year after bouncing back from a sluggish period.

Remortgage lending increased by 15% month-on-month in January, with 25,600 loans completed in the month, according to figures from the Council of Mortgage Lenders this week.

Brian Murphy, head of lending at Mortgage Advice Bureau, said homeowners were starting to take advantage of low rates.

“After an extended period of sluggish activity, the remortgage market picked up considerably in January as homeowners rushed to make the most of the record low rate deals currently available on the market,” he said.

But Murphy warned borrowers to act fast as rates were only likely to rise after this point.

“With recent warnings suggesting that lenders are beginning to react to rising swap rates by pulling historic low deals, it’s likely there will be a boost in remortgaging in the coming months as homeowners seek to lock into low rates before they hit the bottom of the curve,” he added.

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There was not much good news for first-time buyers, however. While the amount needed for deposit is falling, Murphy said borrowers needed further support.

“The average loan-to-value for first-time borrowers has also risen to 83%, reducing the amount needed for a deposit,” he said.

“However, there has also been a significant fall in lending to first-time buyers. Although the Help to Buy scheme is propping up higher LTV lending options, more needs to be done to ensure first-time buyers are not barred from the housing market, particularly once the scheme has ended.”